Buying and selling used medical equipment to improve capital budgets requires understanding fair market values for assets. But what exactly does that mean and why is it important?
What is FMV?
Fair market value (FMV) represents how much an item is worth on the market and to a buyer. The valuation assumes that both buyer and seller know enough about an asset to assess it fairly and aren’t withholding any important information, like flaws or maintenance records. From bicycles to catering equipment to heavy machinery, FMV can apply to almost any used purchase.
Current FMV reflects an asset’s condition, age, and market demand. A great example of fair market values in action is the Kelley Blue Book — the biggest resource for used car valuation — which calculates market values based on a wide variety of data.
Why does fair market value matter?
FMV reports empower healthcare facilities to make better decisions about capital equipment strategies. When it’s time to retire or replace an asset, many facilities rely on trade-in offers from the original equipment manufacturer. But these trades often don’t reflect true fair market value, which leaves money on the table and hurts your bottom line.
Knowing the FMV of your inventory can help:
- determine assets’ true value for insurance purposes
- track value depreciation and market trends to forecast the best time to replace equipment
- appraise an asset’s true value to determine ideal disposition methods
Other sources, like tax documents or online searches for pricing, may sound simpler. But these can’t compare your assets to a depreciation table or estimate new replacement costs. They also won’t take an item’s condition or market trends into account.
Fair Market Values with BidMed’s GreenBook
Our own version of the Kelley Blue Book offers real-world pricing for used medical equipment. The BidMed GreenBook has more than 100,000 current data values with an average of 1000+ new data points added every week. In addition, our data specialists analyze actual recent sale prices for similar equipment and summarize findings in an easy-to-read report.
GreenBook FMV reports can help hospitals and facilities negotiate better trade-in offers or determine alternate disposition strategies. If your assets have not retained significant value, GreenBook reports help build a case for tax deductions and donations.